The Washington Supreme Court joined a minority of jurisdictions that hold that insurers may not unilaterally reserve the right to seek reimbursement for defense costs paid in defending non-covered claims through a reservation of rights letter.

In a surprising unpublished decision, the Washington State Court of Appeals recently ruled that an umbrella insurer had a duty to defend a suit against its insured despite the fact the underlying primary insurer had also previously been found to have a duty to defend the same parties in the same suit. Nat’l Fire & Marine Ins. v. Liberty Mut. Ins., Nos. 66900-1, 66901- 1 Division One, Washington Court of Appeals (Jul. 16, 2012) (unpublished).

While several courts around the country have concluded a potentially responsible party ("PRP") letter from the U.S. Environmental Protection Agency ("EPA") or a state regulatory agency is sufficiently adversarial to be the functional equivalent of a suit, no reported decision has yet extended that rationale to a request for information letter received from a regulatory agency.